Be on the lookout for airdrops in 2021, the most epic year in decentralized crypto yet.
Mid-September surprised Uniswap users with an airdrop of UNI tokens worth around $1,200, at the time. Those who had used the world’s largest crypto Automatic Market Maker (AMM) exchange before Sept. 1, 2020, received the new tokens.
Gas fees soared as users tried to cash in for ether (ETH) and tether (USDT). Since that time, UNI’s price has oscillated, but still remains a top 50 crypto token, with a value almost double what it was at launch (in US dollars, anyway).
Then, on Christmas, 1inch Exchange (along with it’s AMM partner Mooniswap) dropped 1INCH tokens. 1inch has a number of advantages over Uniswap, such as how it aggregates the best prices from a plethora of different decentralized exchanges (DEXs) and has a user-friendly governance page. But what impressed 1inch users most were the 600+ 1inch tokens worth $2.50 each that showed up in their wallets.
The thing is, to get these initial drops, all users had to do was make one relatively small transaction on the protocol. So will other exchanges launch their tokens in the same way? Where can one find new lucrative Decentralized Exchange Airdrops on the horizon?
Firstly, why give away free tokens?
First thing’s first. If these tokens being dropped are governance tokens, rather than accruing value through a percentage of fees, why might a company choose to do airdrops?
Besides the millions of dollars that token holders get “out of thin air,” doing initial coin offerings (ICOs) is no longer the hot trend it was in 2017.
With Ripple and other companies facing backlash and bans in the US for being securities, companies do not want to find themselves in legal trouble. There is no token or security sale if all the tokens are given out for free and they have “no value” (as leaders of the YFI have underlined time and time again).
In other words, airdropping a token is a great way for a protocol to send itself and its backers money without going through the legal hullabaloo. The claim by these protocols is that these drops allow for truly democratic governance. By owning UNI, you can choose how the NYSE of crypto DEXs makes its decisions. It still doesn’t hurt making money along the way.
Since then, speculation about which protocols might be next has echoed in the halls of crypto YouTube. With UNI’s $1.3 billion market cap of tokens made from thin air and hopium, who wouldn’t want to cash in?
A number of other Ethereum DEXs like Uniswap and DEX aggregators like 1inch have been proposed to consider a drop. Since Uniswap and 1inch gave tokens to those who traded before a certain deadline, some have been paying mountains of gas fees hoping to hit gold with the next airdrop.
Here are five protocols that might do a Uniswap-style aidrop next.
Metamask is the darling of Ethereum. Owned by Ethereum’s ConsenSys, Metamask first worked with 1inch to add ERC-20 token swapping directly in its browser-addon interface. Now, Metamask searches several DEXs and aggregators, looking for the best price,
The advantage? No fees for locking and unlocking, you just choose the swap you want and confirm it. The disadvantage? Those fees are dang high. Nonetheless, a governance token could be on the horizon.
Still in beta and not the most beautifully designed exchange on this list, Paraswap still is ripe for a good shot at free tokens. This is because, like 1inch had Mooniswap, Paraswap also has its own Para exchange in addition to all the other DEXs it aggregates.
Also like 1inch, which uses CHI tokens as gas, Para uses GST2 tokens as gas, which can save a little money.
Matcha runs on the 0x protocol, and so one might think that they won’t drop a new token. They already have a token, right?
Wrong. Sort of. The 0x protocol makes DEXs relatively easy to set up, and Matcha is one of many that use 0x, such as Tokenlon. But Matcha is backed by the 0x people, meaning they have been around for a while and have good developers on the team.
And hey, if you could airdrop a token for $1.3 billion like Uniswap did, wouldn’t you?
DyDx has been around for a few years, but only recently has it launched perpetual markets. Now, dy/dx offers leverage and futures in a decentralized platform.
Their fees are relatively high, and the minimum for many trades is 1 ETH, which, at the time of writing, is well above $1,000. And though a pop-up tells users they may not use the protocol from the US, it is still anonymous and decentralized.
If we can remember how many US users were secretly using Bitmex for leverage, we might only imagine some have flocked to dy/dx. And like other exchanges, they don’t have a clear product or token at hand. So they might drop one soon.
Zapper recently updated their interface, and it has a few nice features. The best part about Zapper is that it reads your wallet for yield/liquidity farming and other income-generating contracts and lays it all out for you. So if you’ve added liquidity to Uniswap and Curve and Sushi, Zapper calculates and tabulates it all.
Plus, there is the aggregator exchange. Zapper does not currently have a token or an obvious public form of funding, which makes it a good candidate for an airdrop.
More DEXs dropping tokens
While nothing is for sure, the crypto world does like to repeat itself. If the ICOs of 2017 are anything to go by, there will be plenty more DEXs dropping tokens. How much those will be worth and hold their value is a different matter. It certainly is exciting to see the space expand and excitement build.
This list doesn’t even mention the Layer-2 “solutions” that attempt to get around massive gas fees with parallel chains. But that’s for another time.
NOTE: The views expressed here are those of the author’s and do not necessarily represent or reflect the views of BeInCrypto.